Daily_Nifty_VP's View-27/08/12

LEADER POST for Monday (27/08/12)

1.         The supports are at about 5382, 5368 and and 5349 while other previous lows to watch are 5346/30/09 and 5295. Resistances are at about 5393, 5405 and 5485/90. Three likely +WWs give about 5404, 5433 and 5460 (+WWs with much higher levels are not given) while four likely -WWs give about 5360/36/28/22 (-WWs with lower targets are not mentioned). A huge likely bullish flag gives levels in excess of 5600 unless killed below about 5200. A likely rising wedge, which seems to have broken down, may give about 5295.

After three consecutive days, nifty closed below 5400 indicating that it may be a bit tired. While 5480-5500 is a stiff resistance zone, crucial lower levels are 5364/62 and the zone of 5347-5339. The -ve div on rsi on daily chart posted earlier gave its result and I feel nifty may consolidate till a +ve div develops. However, there is consolation for bulls in that there is no such -ve div on any indicator on weekly chart. Volatility will continue to be high intraday due to expiry next week unless a definite trend develops from Tuesday. Monday's open level and subsequent movement of nifty in the week will confirm bearishness signaled by the last week's candle or otherwise. Nifty will have to give a major breakout next week to sustain its upmove.

2.         PCR at 1.30 and VIX at 16.16. Pre-open high/low at 5393.70/5362.75 and close at 5387.85. The 10tf is a long legged doji and may indicate flat but volatile nifty today.

3.         AS PER 9.30 STRATEGY, SELL ABOVE 5386NF TARGET 5362/45 SL 5416.

4.         I feel NS may find it difficult to cross 5362/64 and if it does then 5339.

5.         An inverted flag gives 5354NS unless killed above 5376.

6.         Inverted flag target met. (9.30 strategy) Target met. If it doesn't recover now then close will be at the lows of the day.

7.         Nifty opened flat and tended to give an impression that the -ve signal given by last week's shooting star may have been negated. But, it kept on sliding slowly and closed -ve and about 36 below Friday's low. Target of the first -ww was met as was that of 9.30 strategy. Fortunately the zone of 5347-5339 held but since it came at the end, it is not clear whether it will hold on Tuesday. An inverted flag identified during the day also gave its target.

The optimists will take solace form (a) nifty did not open gap down, (b) it closed above psychological level of 5350, (c) NF closed above important number of 5353, (d) all indicators are at oversold level and (e) it seems to have made a double bottom with low of 17th August.

The pessimists will simply see that it closed below last week's low.

The intraday chart of nifty spot values with 5 min candles is shown below.